Milk price increase is branded '˜derisory' by UFU

He claims they are lagging far behind their counterparts south of the border and in Great Britain, and has warned they cannot take farmer loyalty for granted when that is not being returned.

Mr Bell added: “We have been meeting with processors, making clear that farmers expect a realistic price increase to reflect the weakening of sterling and a general improvement in dairy markets. We believed they had taken this message on board, but what they have delivered is a smack on the teeth for their farmer suppliers. They have lived with 18 months plus of extreme cash flow pressure and had genuine cause now to believe better times had finally arrived.”

He added that the UFU would now take a tougher line with processors. “We have attempted to work with them for the good of the industry – but I think our approach now needs to be more hostile and critical. It is clear the interests of farmers are well down their list of priorities,” said the UFU president.

The UFU says it had been assured by processors that market improvements would be passed on to farmers as soon as possible. It says however this is not happening, citing gains enjoyed by dairy farmers elsewhere. “Dairy cooperatives south of the border are responding more positively to events on global markets – and they are losing out, rather than gaining from the weakness of sterling. Prices are also rising sharply in Great Britain – to the degree that some processors here are buying cheap from local farmers and selling milk on a booming spot market for up to 35 pence a litre. This only adds to a sense that the processors are determined to restore their own profits, with no thought for the farmers they rely on to have a business,” said Mr Bell.

The UFU carries out its own regular calculation of what the milk price should be, based on market returns and currency rates. That index is pointing to a minimum price increase of two pence a litre, when processors and delivering just about half that, with signs they are determined to continue holding back price increases. “This is not equitable or fair – and farmers are rightly angered by how they are being treated,” said Mr Bell.